As the fourth quarter of 2018 approaches, many businesses are planning out the last of their budgeted operations for the year and looking ahead to 2019. With holidays, colder weather and increased spending, this time of the year is always more expensive for businesses across the board. If you find yourself working with a tight budget for the remainder of the year and in need of some ways to cut costs, consider these ten simple ways to save money on the production floor.
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Audit Energy Consumption – Aside from paying workers, paying for energy is the biggest cost any manufacturing firm faces. Spend some time auditing your machinery and general flow of work. If there are slower times of the day or week, use less energy during those times. This includes simple steps such as turning off computers and lights when they’re not in use.
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Run Preemptive Maintenance – After you’ve audited energy consumption, take the time to schedule some routine maintenance on machinery during slow business hours. Keeping equipment in top working order saves energy and prevents lost revenue from downtime.
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Go Paperless Wherever Possible – Aside from the socially-responsible example your company will setting, avoiding the use of paper where possible cuts down on simple miscellaneous facility costs. On a related note, use recycled cartridges and toner to save money on office costs.
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Revisit Supply Routes – How much fuel and time is spent delivering a shipment to a customer? Could you tweak the delivery route to avoid busy intersections or peak traffic flow? Small adjustments can mean more shipments get out of your facility every day, allowing more space in storage for faster order turnover.
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Be Mindful of Overproduction – It’s never good to run out of finished product when you need it, but keep in mind the cost of storing excess inventory. By operating on a lean inventory system through the end of the year, you’ll avoid unnecessary spending on product sitting on the shelves.
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Do You Need all that Packaging? – Aside from supplies to safely ship your finished product to consumers or partnering businesses, take audit of the packaging you’re using. By itself, it can be expensive, but when paired with your products it can add bulk and weight to your shipments.
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Sell Scrap Materials – Whether it’s scrap metal, damaged finished products or anything in between, much of what comes out of your facility is worth something to someone. If you don’t already have a network of vendors and businesses, tap into your network and set up negotiations to put some positive cash flow back in the company and get rid of unwanted materials.
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Renegotiate with Suppliers – You might have a deal with your material suppliers that works for everyone involved, but those suppliers experience higher costs towards the end of the year, too. Come to your suppliers with a thoughtful, laid out plan of how you’ll save everyone money and they’re likely to reconsider your rates.
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Wait to Upgrade Software – New software not only costs money but time as your employees learn how to use it. If your business can handle daily operations for a few months before making sweeping software changes, consider waiting until the new year. You’ll avoid unintentional downtime and save some money in the immediate future.
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Do Some Winter Cleaning – You’ve likely amassed extra office supplies, furniture and equipment over the calendar year that you no longer need or ended up not utilizing. Selling that off can not only free up space for new equipment but it can add some money back into administrative budgets.
Before the busy fourth quarter of the year occupies all of your time and thought, performing some cost-cutting measures around your facility is a great way to improve cash flow, save money and preemptively avoid problems. What are some cost-cutting measures that have worked for your business? Share with us in the comments below.